TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 62

Estate Duty

131.

I have two concessions relating to estate duty.

Members will recall that in 1982, in recognition of rising asset

values, the estate duty exemption limit was raised to

$2 million, and the rate of duty scaled from 10% to 18% on

estates between $2 million and over $4 million. To reduce the

inflationary element inherent in the rise in values in recent years, I propose to replace the present schedule of rates with a new schedule scaled from 6% on estates between $2 million and

$2.5 million to 18%

estates over $5 million (52).

on

Additionally, I propose that the duty free limit on gifts be

increased from $50,000 to $100,000 to take account of

inflation (53).

132.

The cost to the revenue of these two proposals will be approximately $25 million both in 1987-88 and in subsequent

years.

"Time Apportionment" Basis of Taxation

133.

In the area of tax legislation there is always some tidying up to be done either on grounds of equity or to improve

the administration of the system. In recent years the assessment to salaries tax of employees who render services both within and outside Hong Kong has been a growing area of dispute

between the Inland Revenue Department and taxpayers. These disputes, which

which are commonly referred to as "time apportionment"

(52)

On estates between

$2,000,001 and $2,500,000 $2,500,001 and $3,000,000

6응

8%/%

$3,000,001 and $3,500,000

10%

$3,500,001 and $4,000,000

12%

$4,000,001 and $4,500,000

14%

$4,500,001 and $5,000,000

16%

$5,000,001 and above

18%

(53)

Under the first proviso to section 6 (1) (c) of the Estate Duty Ordinance.

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